Ping An Insurance Earnings: New Business Growth Slows but Operating Profit Rebounds

We retain our fair value estimate for Ping An Insurance at HKD 59 per H share after the company’s broadly in-line 7% year-on-year growth in interim net profit on a 57% increase in investment return thanks to better stock market performance. Though the 11% year-on-year new business value, or VNB, growth was softer than our expected 13%, we believe the stabilizing agent headcount and low base in the second half of 2023 should translate to respective full-year forecast 20% and 34% growth in VNB and net profit in 2024. The stock remains undervalued, trading at 0.5 times 2024 price to embedded value. Among Chinese insurers, we like Ping An and China Pacific Insurance, best for above-peer VNB growth and lower-than-peer policy costs. Offering over 7% dividend yield, we believe Ping An remains an attractive dividend play.